Iloilo’s resplendent property market
Iloilo is one of the most competitive property markets in the Philippines.
The city continues to attract large outsourcing firms, while property developers have been expanding their office, residential, and leisure footprint here to take advantage of sustained regional economic growth and property market recovery in general.
We see Iloilo thriving in the long run due to stable macroeconomic pillars–strong regional economic growth, sustained inflow from Ilonggos working abroad, and the promised benefits of infrastructure implementation eventually further enhancing the city.
Thriving office market
Iloilo continues to attract outsourcing locators given its skilled and talented manpower, who are able to handle higher value outsourcing services.
Note that talent availability remains among the major considerations of outsourcing firms when they locate outside of Metro Manila. Iloilo produces about 7,000 graduates annually according to Commission on Higher Education (CHED). This young Gen Z and millennial-dominated workforce continues to contribute positively to the economy of Iloilo.
What also works well for Iloilo is the fact that key hubs outside of the capital region continue to attract interest from large office locators, including business process outsourcing firms (BPOs). Large multinational players including Teletech, IQor, Reed Elsevier, Concentrix, Hinduja Global Solutions, Telus, WNS, Carelon Global Solutions, Transcom, TDCX, and Nearsol are already in Iloilo.
Some of these firms are also planning to expand their footprint and employ more workers. We see this having a positive impact on the Iloilo economy and should further fuel the disposable incomes and purchasing power of Ilonggos.
As of H1 2024, Iloilo captured 13 percent of total deals recorded outside Metro Manila, equivalent to 16,000 sqm.
In 2024, about 116,400 sqm of new office space will likely be completed with the delivery of SM Strata Tower 1, Atria Technohub 1, Robinsons Cybergate Iloilo Tower 3, Enterprise One, and the International Corporate Plaza. From 2024 to 2026, we project the annual average delivery of 52,400 sqm of new office space ready to accommodate BPOs requiring office buildings with large floor plates.
Iloilo continues to offer an adequate supply of Grade A and PEZA-accredited buildings, with vacancy currently at 24 percent as of the end of H1 2024.
Dynamic residential landscape
Prices of house-and-lot (H&L) units in Iloilo rose by an average of 6 percent a year from 2016 to 2023. This is among the fastest price accelerations across the Philippines. With vital infrastructure projects scheduled for completion, we expect prices to continue rising in the near to medium term.
The horizontal segment also remains buoyant, with lot-only developments recording a faster 12 percent price increase annually from 2016 to 2023. This is supported by our general observation especially in key residential hubs outside Metro Manila where investors continue to look for bigger and more open spaces, a key requirement that was highlighted by the pandemic.
Developers are also incorporating unique elements into their townships to differentiate themselves in the market. Iloilo Business Park houses the Iloilo Convention Center, the Atria Park District has a hospital and a university, and Iloilo Centrale will have a park and open spaces.
‘Build, Better, More’
The growth of Iloilo will also hinge on the implementation of public projects. These include the Panay-Guimaras-Negros Inter-Island Link Bridge, a 32.5-km bridge that will connect Panay Island, Guimaras Island, and Negros Island in Western Visayas. The P188-billion project is targeted for completion by 2030.
Once completed, this project is seen to enhance connectivity within the region. This should have substantial positive impact on land and property prices, boosting demand for leisure-oriented developments in the region.
Other game-changing projects include the Iloilo International Airport Rehabilitation, estimated to cost approximately P14.7 billion and likely to expand the airport’s capacity; the Panay Railway that will undergo a feasibility study and is projected to be completed beyond 2028; the Iloilo-Capiz-Aklan Expressway (ICAEx), a 210-km, eight-lane expressway traversing 22 cities and municipalities along three provinces; and the Iloilo-Sta. Barbara Bus Rapid Transit, a 20-km bus rapid transit (BRT) system that will ease travel between Iloilo Airport, Iloilo City, and the municipality of Santa Barbara.
These are exciting developments that will further redefine, revolutionize, and revitalize Iloilo’s already resplendent property market.
For feedback, please email joey.bondoc@colliers.com
